Protecting the Public Trust by Prohibiting State Government Workers from Using Nonpublic Information for Personal Profit

WHEREAS, Arizona State executive branch employees are dedicated to serving the people of this State, often going above and beyond their official duties and responsibilities to serve and respond to the public's needs; and

WHEREAS, due to the nature of their work, Arizona State executive branch employees often have access to nonpublic information; and

WHEREAS, A.R.S. 38-504(B) prohibits public officers and employees from using or disclosing confidential, nonpublic information; and

WHEREAS, the proliferation of prediction markets and the sale of so-called "event contracts" provides the means for individuals to wager on a wide variety of topics, including government actions, election outcomes, politics, military actions, weather events, wildfires, sports and other global, federal, state, and local affairs; and

WHEREAS, many of these wagers are expressly prohibited by applicable State law and the federal government is not meaningfully regulating insider trading or imposing commonsense ethical standards on these markets, and

WHEREAS, media reports and a recent federal indictment indicate that government employees outside Arizona have used nonpublic federal government information to win millions of dollars by placing wagers on government actions including military actions in Venezuela and Iran and that such behavior could have endangered the lives of United States service members; and

WHEREAS, the public trust is eroded when public officials use nonpublic information learned in the course of their employment for personal profit.

NOW, THEREFORE, I, Katie Hobbs, Governor of the State of Arizona, by virtue of the powers vested in me by the Arizona Constitution and laws of this state, hereby order and direct as follows:

1. All Arizona State executive branch employees are strictly prohibited from disclosing or using any nonpublic information obtained due to their public service to personally profit from, avoid loss from, or assist another person or entity, in profiting or avoiding loss from participation in prediction markets. Any violation of this order may result in dismissal or other appropriate sanctions and may be referred to law enforcement.
2. In order to ensure the proper conduct of government business, to the extent not already so designated, all nonpublic information obtained by Arizona State executive branch employees due to their public service that could be used for profit or the avoidance of loss via transactions on prediction markets is hereby designated confidential. Such designation is warranted in order to preserve public trust in the proper functioning of State government.
3. This Executive Order shall not confer any legal rights or remedies upon any person and shall not be used as a basis for legal challenges to any action or inaction of a State agency, officer, employee, or agent thereof.
4. Nothing in this Executive Order shall be construed to contravene any federal or State law, regulation or court order. Nothing in this Executive Order shall affect or alter the existing statutory powers of any State agency.
5. For purposes of this Executive Order, "Arizona State executive branch employees" shall include all employees and officers of the Governor's Office and all executive departments, agencies, offices, and all state boards and commissions, except for: (a) any State agency that is headed by a single elected State official; (b) the Corporation Commission; and (c) any board or commission established by ballot measure during or after the November 1998 general election. Other statewide elected officials, independent boards and commissions, and the judicial and legislative branches are encouraged to adopt comparable policies for their employees.
6. If any provision of this Executive Order or its application to any person or circumstance is held invalid by any court of competent jurisdiction, such invalidity does not affect any other provision or application of this Executive Order which can be given effect without the invalid provision or application. To achieve this purpose, the provisions of this Executive Order are declared to be severable.
7. This Executive Order shall take effect immediately upon signature, and shall remain in effect until repealed, replaced, or rescinded by future Executive Order.